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25 August 2017

MSWG IN THE NEWS

WATCHDOG GROUP RELIEVED AFTER BURSA SAYS NO PLANS TO LIST DUAL-CLASS SHARES

http://www.theedgemarkets.com/article/watchdog-group-relieved-after-burs...

MSWG’S QUICK TAKE ON-ONGOING CORPORATE DEVELOPMENTS

SCOMI GROUP BERHAD (“SGB”) / SCOMI ENERGY SERVICES BHD (“SESB”) / SCOMI ENGINEERING BHD (“SEB”)

The Board of Directors of SGB announced that the company has submitted a formal proposal today to:

(i) the Board of SESB in respect of the proposed merger of SESB with the company; and

18 August 2017

VOICE OF MSWG

Listing of Dual-Class Shares
Bursa Malaysia’s clarification that it has no plans to facilitate the listing of dual-class shares on Bursa Malaysia has come as a huge relief to us at the Minority Shareholder Watchdog Group (MSWG).

To do so would have been a huge disavowment of one of the central tenets of capital markets: that of one vote-one share. While other jurisdictions do allow it, notably the U.S., Brazil, Canada, France, Italy, Sweden, Switzerland, Denmark, Russia and Finland, the risks are there for all to see.

These run the gamut of abuse of management power, including prejudiced inter-company loans, mergers/acquisitions and related party transactions, all under the guise of ‘owner knows best’.

MARKET AND REGULATORY UPDATE

Malaysia Weighs Dual-Class Shares as Exchanges Battle for IPOs

It was reported by Bloomberg that Bursa Malaysia Berhad had in its emailed response to Bloomberg queries stated that it is considering whether to allow companies with dual-class share structures.

According to the report by Bloomberg, the structures give company founders and leaders outsized powers that are seen by investor advocates as undermining the one share, one vote system of corporate governance. Approval by Bursa Malaysia would mean opponents of the structures would face an increasing number of stock exchanges willing to list firms with multiple classes of stock.

[Source: Media release on Bloomberg’s website on 8 August 2017]